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Microsoft Corporation
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==== Growth Stage 1 (Startup) ==== |- |Discount Rate(%) |30% |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital. |- |Probability of Success(%) |70% |Research suggests that for a company in this growth stage (i.e. stage 1), the rate is suitable 70% of the time. |- | colspan="3" |
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